Recent pay claims before the Labour Court

As the Irish economy continues to recover, trade unions have been looking for wage increases for their members, in the absence of any nationally agreed collective wage bargaining. A number of these claims have come before the Labour Court.

Whilst there may have been some concerns that 2016’s high-profile transport claims would lead to higher figures this appears not to be the case.

An Engineering company v SIPTU, CD/17/147, 17th July 2017

This case concerned a pay claim by SIPTU for a 7% pay increase over two years for the employees. The company based in the midlands is a leading manufacturer of hydraulic cylinders for the agricultural and industrial sector.

This dispute could not be resolved at local level and was the subject of a conciliation conference under the auspices of the Workplace Relations Commission (WRC). As agreement was not reached, the dispute was referred to the Labour Court on 23rd May 2017 in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on 27th June 2017 and the recommendation of the court was delivered on 17th July 2017.

Union’s case
The union was seeking a 7% increase for their members over two years. The union contend that the company were in a financial position that allowed them to pay the increases sought. Union members believed that their contribution towards LEAN manufacturing processes merited the proposed increases.

Employer’s case
The employers put forward that their wage bill, which should operate at approximately 28%, was running at 33%. Throughout the recession the company did not implement any pay reductions for its employees and had been providing wage increases since November 2013. The company also contended that it was essential that they get full cooperation with the LEAN development programme.

Recommendation
The union’s claim was for a 7% increase in pay over a period of two years. The company had made on offer of a 5% pay increase over a three year period from January 2017 to January 2019.

Having considered the submissions of both parties, the Court recommended that the company’s pay offer, as outlined in the letter dated 13th March 2017, should be increased to 2% from 1st January 2017, 2% from 1st January 2018 and 2% from 1st January 2019, and that the parties should jointly agree to engage further on the most efficient means of ensuring that the productivity/LEAN system works to the maximum effect by all in the company which it is accepted is in everyone’s interest.

An industrial services provider v SIPTU, CD/17/90, 08th June 2017

The basis of this dispute was a pay claim by the union on behalf of their members employed by the company specialising in civil and industrial construction and engineering services. The company is based in Dublin.

This dispute could not be resolved at local level and was the subject of a conciliation conference under the auspices of the Workplace Relations Commission. As agreement was not reached, the dispute was referred to the Labour Court on the 4th April, 2017, in accordance with Section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on the 31st May, 2017 and the recommendation of the Court was delivered on 08th June 2017.

Union’s case
The union were seeking a 5% pay increase for all members as they had not received a pay increase since 2007. A proposal for a 2% increase was put to its members which was rejected as they felt it was insufficient.

Employer’s case
The company stated that they were not in a position to grant pay increases to staff which would result in rates in excess of the normal industry rate if they were to remain competitive. They were stated that the 2% increase that was proposed at conciliation was a reasonable increase in the circumstances.

Recommendation
The Court gave careful consideration to the written and oral submissions of the parties and noted that extensive engagement had taken place between the parties, and that proposals for settlement of the dispute, recommended by both parties for acceptance, were rejected by the trade union.

The persons represented before the Court fell into two categories. On the one hand there were approximately four cleaning staff whose rate of pay had, without dispute between the parties, traditionally and consistently been set by reference to the rates set as a minimum by Employment Regulation Orders from time to time. That method of pay determination had, in December 2016, resulted in an increase in the rate paid to the four staff concerned. A further increase is due, the Court understands, in late 2017 and a further increase again in 2018.

Secondly, there were approximately 28 staff whose rates of pay are not set by reference to an Employment Regulation Order and no increase has been applied to their rate of pay for a number of years.

The Court was reluctant to disturb the long standing arrangements for pay determination in the company and did not make any recommendation as regards cleaning staff who, as a result of the implementation of the relevant Employment Regulation Order, had received a pay increase in December 2016 and were due to receive further increases in 2017 and 2018.

As regards the 28 staff in various roles whose pay determination mechanism is not related to an Employment Regulation Order, the Court recommended that the Company should, with effect from 1stJanuary 2017, apply an increase of 2.5% to rates of pay of such staff. The Court further recommended that the parties should engage in good time in 2017 with a view to agreeing a pay position to apply for 2018.

A food preparation company v SIPTU, CD/17/58, 22nd May 2017

The union contended that their members employed should be granted a pay increase. The company have a number of operating sites around the country.

This dispute could not be resolved at local level and was the subject of a conciliation conference under the auspices of the Workplace Relations Commission. As agreement was not reached, the dispute was referred to the Labour Court on 28 February 2017 in accordance with section 26(1) of the Industrial Relations Act, 1990. A Labour Court hearing took place on 17 May 2017.

Union’s case
The union stated that a wage increase was justified without any requirement for increased productivity. They contended there had been pay freezes and pay reductions for the past eight years. The union was seeking a pay increase of 8% over a 24 month period made retrospective to February 2016.

Employer's case
The Company faced an extremely difficult trading environment, in particular because of Brexit.
The Company had not reduced basic pay or full standard productivity bonus during the recession years. They informed the Labour Court that a pay increase without any element of self-financing would be detrimental to the business.

Recommendation
The Court gave very careful consideration to the written and oral submissions of the parties.
The Court noted the fact that pay rates had been at the current level without alteration since 2008 and also noted the concerns of the company as regards site effectiveness and competitiveness. The Court had not been provided with any detailed analysis with regards to the financial operation of the site or the impact of wage costs on the overall cost structure of the facility and its competitive position. Taking account of all of the circumstances of the matter the Court recommended that pay increases should apply as follows:

An increase of 2% should be applied with effect from 1st January 2017, and that a further increase of 2% should apply with effect from 1st January 2018.

Separately, and in the interest of overall site efficiency and competitiveness the parties were advised to engage to find agreement if possible on matters associated with the afternoon break, overtime working with particular reference to Friday afternoon working, the introduction of a four day work pattern and annual leave at Christmas. Wherever agreement could be found on such matters the financial value of the change should be shared between the parties separately to the increases outlined above.

A food preparation company v SIPTU, CD/16/276, 16th January 2017

This dispute relates to a claim by the Union for a 24-month pay agreement for their members.

The Union were seeking a 5% pay increase effective from 1st January 2015 and a 5% increase effective from 1st January 2016.

The union was seeking a 24-month pay agreement to replace the previous agreement which expired on 3st December 2014. The union’s claim was for a 5% increase with effect from 1st January 2015 and further increase of 5% with effect from 1st January 2016.

The employer stated that any pay claim must be realistic, deliver the platform to maintain and ideally grow the business and ensure competitiveness. They took the position that annual pay increases of 5% were unrealistic and would threaten its efforts to remain competitive in a highly volatile market. The employer also indicated its preference to have certainty about pay increases for 2017 and onwards. It had proposed pay increases of 1.5% per annum.

This dispute could not be resolved at local level and was the subject of a conciliation conference under the auspices of the Workplace Relations Commission. As agreement was not reached, the dispute was referred to the Labour Court on the 2nd September 2016 in accordance with Section 26(1) of the Industrial Relations Act, 1990. The recommendation of the court was delivered on 16th January 2017.

Recommendation
The Court recommended that the following pay increases be applied to the grades in respect of whom the dispute was referred:

•2.5% with effect from 1 January 2015;
•2.5% with effect from 1 January 2016;
•2.5% with effect from 1 January 2017;
•2.5% with effect from 1 January 2018.

Conclusion
The cases above demonstrate that the Labour Court is making recommendations on pay claims. The phased approaches that are being adopted seem to follow an optimistic mind-set that the current economic growth will continue. It must be pointed out, however, that not all companies will be in a position to make pay increases as market uncertainty concerning Brexit persists. Where companies find themselves in this position, they should be prepared to present financial and other evidence supporting this position.